THE BIG PICTURE
As the world braces itself for more turmoil while opposing forces that continue to wage war in the Middle East trade threats and engage in tit for tat military strikes that intensify at every turn, Sri Lanka finds itself in an economic quagmire that portends serious socio-political undertones.
A POWDER KEG THREATENS OUR WORLD
First and foremost, and despite assurances that we have sufficient fuel stocks till the end of April, the sudden introduction of the QR code based National Fuel Pass system on 15 March stirred up a hornet’s nest of protests at petrol stations as the motoring public began reliving the nightmares of four years ago.
Questions were asked about how such measures – including the initially meagre weekly allowances – will affect local supply chains, and critical sectors of the economy such as transport and farming, even though they may be necessary to conserve energy for rainier days.
As it is, we face the prospect of spiralling oil prices (and as a consequence, yet another cost of living bubble), the fall out from the squeeze on global supply chains – which in turn, threatens food security – and yet another balance of payments crisis.
Sri Lanka’s balance of payments is at risk of widening sharply as an import dependent economy faces a depletion of forex inflows against a backdrop of shrinking workers’ remittances from the Middle East, tapering tourism and the likelihood of exports such as tea taking a hit… at least until there’s a sustainable cessation of hostilities.
And if our foreign exchange reserves (US$ 6.8 billion at the end of January) continue to shrink, Sri Lanka’s ability to service its debt portfolio will come into question once again.
Equally disconcerting is the gradual erosion of the value of the Sri Lankan Rupee as defending it is a costly business.
Another dimension to this unfolding scenario comes in the form of social and political unrest, the former led by the poor and the latter by virtue of the so-called ‘joint opposition’ taking every opportunity to point fingers at what they say is an inept administration… and retorts from the government that opposition forces continue to be served by scores of corrupt politicians who were rejected by the electorate.
The grim reality is that there will be no respite for any of us until and unless there’s an end to the hostilities – before it’s too late. Hence the call for ‘No War’ – peace is surely the yearning of right-minded citizens at home and away.
This content is available for subscribers only.
